What is Employee Attrition? Definition, Rate, Factors, and Reduction best practices

What is Employee Attrition? Definition, Rate, Factors, and Reduction best practices

These days, employee attrition is a common phenomenon experienced by every other organization or business enterprise. However, it is better that every organization should be prepared to deal with it otherwise it can lead to unexpected changes and thereby losses.

What is Employee Attrition?

Employee attrition can be defined as the resignation of an employee from his company due to several reasons. These reasons could be personal or professional. These reasons could be job change, retirement, family obligation, relocation to name a few. Employee attrition becomes a matter of concern when it crosses a certain limit. Most importantly, it could lead to an absence of diversity at the workplace.  Also, employee attrition can vary from organization to organization.

How is Employee Attrition Measured?                                        

It is indeed necessary to measure employee attrition to ensure that you are not losing out on more employees that you require. This kind of a situation, can lead to lot of vacancies, absence of skilled manpower and thereby indirect loss of your organization.

Employee attrition rate

Attrition Rate = Number of employees who have left in a given period     x100

                            Average number of employees in the same given period

What Factors lead to Employee Attrition?

There are several factors which bring about employee attrition. Let us now try and understand the causes of employee attrition.

1. Personal Reasons: Any kind of change in personal life is the major factor leading to resign from the present job. It could be due to change in the wife’s job or the child’s school which might lead you to make the job change. Or perhaps, you are single-handedly taking care of your parents and you need to resign from your job. It could also be due to health reasons that you decide to take early retirement. In simple words, it can be understood that there are multiple personal reasons which can persuade an employee to resign from his present job making employee attrition unavoidable.

2. Lack of Professional Motivation: The inability to rise in career in your present organization is also viewed as one of the major reasons attributed to employee attrition. When you have the talent and calibre to rise in the hierarchy of your organization but not given the opportunity to do so, can persuade you to leave your job. However, the HR plays an instrumental role at this stage. In simple words, you do not wish to continue working in an organization which does not value your talent and provides no growth in your career. Such a kind of scenario is most likely going lead to employee attrition.

3. Challenges at the Workplace: This is another major factor leading to employee attrition. If your organization fails to look after your needs at the workplace, you are most likely to feel demotivated. This could in turn give rise to the urge to resign from your job. Also, if your organization does not provide an amicable work environment, then also you might think of leaving your present job. However, if your personal and professional goals align with that of your company then you are bound to continue working in your organization.

Here again, the HR plays an indispensable role and needs to investigate the reasons for high level of employee attrition. Perhaps, it could examine the reasons mentioned by the employees in the exit interview and work upon them to reduce the level of attrition.

4. Outbreak of Covid-19: Yes, you heard it correct! The sudden outbreak of the pandemic Covid-19 brought a decline in the global economic activity. The lockdown imposed by the central government forced the closure of non-essential business activities. Consequently, several businesses were shutdown leaving no other option but to remove employees from their jobs. Hopefully, this scenario is going to improve in 2021 as gradually businesses and start-ups are commencing their business once again.

What are the Best Practices to Reduce Employee Attrition?

If you are unable to retain your employees, then it is time to look out for some of the best practices attempting to reduce employee attrition.

1. Find the Exact Cause: First and foremost, you need to find out the real reason behind high level of employee attrition. It is the HR which needs to investigate the reasons behind it. There are several reasons for instance, unsatisfactory pay package, lack of motivation, business relocation or business restructuring to name a few. Once the exact reason for the high attrition rate is identified, then prepare the requisite strategies to bring down employee attrition.

2. Improve the Compensation Package: It is extremely difficult to offer a lucrative package to the employees. But, believe me; improving the compensation package being offered goes a long way in reducing employee attrition. The HR of your organization should do a comparative analysis of the package being offered across your industry. This will help you to understand and improve the pay package accordingly.

3. Select the Right Candidate for the job: The selection process of every candidate is the first step towards hiring. So, you should stay focused on checking the loyalty and retention aspect of the candidate as your future employee. This can be done by asking few relevant questions from the candidate.  In other words, the HR of your organization should spend sufficient time in screening the candidate and selecting the right one for the job to ensure employee retention instead of employee attrition.

4. Seek feedback from the Employees: One effective method of understanding whether your employees are happy or unhappy with their role is by seeking feedback from them. Moreover, feedback should be viewed in a positive manner rather than as criticism. The HR of your organization can organize meetings with the different departments and then take feedback from the employees about their level of satisfaction or discontent.

5. Improve the Working Conditions: One major factor which is contributing to employee attrition in the present scenario is the toxic workplace conditions. This aspect has become all the more significant in the Covid-19 working scenario. Your organization needs to introduce several employee friendly policies to enhance the workplace. For instance, your organization can introduce the concept of remote working days in a month.  Or perhaps, felicitate the outstanding employee every month with a voucher. The entire idea is to keep the employees happy so that they remain loyal to the organization and remain with the organization for a long time.

6. Decide upon a Growth Plan: When you think about your employee’s growth in career, he/ she is bound to remain loyal to your organization. Every employee is endowed with a unique set of skills and acumen.You must select the right employee for a specific project and ensure to make the employee realize his potential as well. This will make the employee feel special and understand the fact that his work is getting noticed.Recognition of one’s work at the workplace plays a vital role in retaining the employee at the workplace.

Conclusion

Therefore, to conclude, several reasons are responsible for employee attrition. However, most of them can be prevented by the organization if proper analysis and steps are taken in this direction. Indeed, in the present uncertain economic scenario, employee attrition is going to witness a rise. So, organizations should be prepared before hand to deal with this phenomenon so that no obstacle comes in the path of their growth and success.


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